Medco, Enron tie up to build power plant
Medco, Enron tie up to build power plant
JAKARTA (JP): Publicly-listed PT Medco Energi has tied up with Enron Development Co. of the United States to build a 136- megawatt gas-fired power plant in Samarinda, East Kalimantan,
Medco's chairman, Arifin Panigoro, announced over the weekend that the company's shareholders had approved the tie-up through an extraordinary meeting early last week.
Arifin noted that the approval of the company's plan marks the diversification drive of Medco's operations into power generation from its core business of oil and gas.
In a report to the shareholders, Arifin explained that the total investment for the joint venture stands at US$37.5 million.
The equity of the joint venture is 50 percent owned by Medco and 50 percent by Enron.
The report noted that the power venture, named PT East Kalimantan Power Corp., will establish the power plant under a build, own and operate (BOO) contract with the state electricity company PT PLN.
The construction of the plant is projected to start next year with the first 68 megawatt phase to be operational in 1997 and the second in 1999.
East Kalimantan Power, which will operate the power plant, will sell its electricity to PLN.
Under the contract, PLN will be required to buy at least 80 percent of the electricity generated by East Kalimantan Power for 20 years.
"Based on the contract, a minimum revenue for 20 years will be secured for East Kalimantan Power," the report said.
Gas pipeline
In addition to the power plant, Arifin also reported that Medco will complete its gas pipeline project from its gas fields in Tarakan to Bunyu island, both in East Kalimantan, in the middle of next year.
Arifin explained that Medco's gas output, projected to total 30 million cubic feet a day, will be consumed by the Bunyu methanol plant, whose operation will be taken over by Medco from the state oil firm Pertamina.
The Bunyu plant, which has an annual production capacity of 330,000 metric tons of methanol, is currently the only methanol plant in Indonesia.
The Humpuss Group, through its subsidiary PT Kaltim Methanol Industry, is building the country's second methanol plant in Bontang, East Kalimantan. The plant, which will have an annual capacity of 660,000 metric tons, is expected to start commercial production in 1997.
Medco is the first oil company listed on the Jakarta Stock Exchange. It floated 21.7 percent of its enlarged capital base through an initial public offering on the exchange last October.
Medco is a holding company for its four subsidiaries, comprised of onshore drilling company PT Meta Epsi Antareja, offshore drilling firm PT Apexindo Pratama Duta, and oil and gas exploration and production companies PT Etaksatria Petrasanga and PT Eksita Pantranagari.
Last week, the company acquired Indonesia's oldest oil firm PT Stanvac Indonesia and its affiliate from American oil giants Exxon and Mobil Oil.
Medco reported a net profit of Rp 18.4 billion (US$7.98 million at current rate) with earnings per share of Rp 181.6 last year. The profit was 37 percent higher than Rp 13.4 billion in 1993.
It projected a 50-percent increase in its net profit this year and another 50-percent increase next year. (rid)